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2016 (10) TMI 67 - CESTAT ALLAHABAD

2016 (10) TMI 67 - CESTAT ALLAHABAD - TMI - Clandestine removal of goods - shortage of finished goods of 69.93 MT of MS ingots - power consumption for one MT of MS ingots varies from 990 units to 3703 units per MT - manufacturing of MS ingots on the basis of consumption of electricity - Demand and imposition of penalties - Held that:- - Clandestine removal of goods - Demand alongwith interest and penalties - excess electricity consumption - on the basis of excess electricity consumption, th .....

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the goods has already been held by the ld. Commissioner as not sustainable in the facts of this case. Therefore, demand is also not sustainable as the same has been confirmed on account of clandestine manufacture and clandestine removal of goods. Further, we find that in the Show Cause Notice although it is discussed that certain katcha slips were found during the course of investigation for purchase of scrap on the basis of these slips, no demand of duty is proposed. As there is no duty demand .....

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clandestinely - Held that:- there are charges on the appellants that goods have been removed clandestinely by the appellants but the charges of clandestine removal have been dropped and therefore, in these circumstances, it cannot be held that goods have been cleared clandestinely. Although the appellants has paid the duty that might be to settle the issue at that stage, but from the records it is not coming out that the charge of clandestine removal has been proved with any supportive evidence .....

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ong with interest and imposition of penalty on the main appellant and penalties on co-appellant is set aside. - Decided in favour of appellant - Ex. Appeal Nos. 58773-58776/13, Ex. Appeal Nos. 58892-58895/13 - Final Order No. 70793-70800/2016 - Dated:- 22-8-2016 - Anil Choudhary, Member (Judicial) And Anil G. Shakkarwar, Member (Technical) Shri Rajeev Ranjan, Joint Commr. (A.R.) for the Department/Revenue Shri Rajesh Chibber, Advocate, for the Assessee ORDER Per Mr. Anil Choudhary The Assessee a .....

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urse of investigation, it was found that there was a shortage of finished goods of 69.93 MT of MS ingots and from the residence of Shri Anil Kumar Agarwal certain katcha chits were found which were showing the purchase of scrap during the period from January, 2007 to March, 2007 indicating a purchase of about 437.58 MT of scrap. It was also observed that power consumption for one MT of MS ingots varies from 990 units to 3703 units per MT. Therefore, a case has been booked against the appellant o .....

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vestigation, allegation was made against the appellant on the premise that as these goods were found short, therefore they have been removed clandestinely, therefore duty of ₹ 3,03,523/- was also sought to be appropriated which has been paid by the appellant during the course of investigation. Penalties were also proposed to be imposed on the appellants. During the course of adjudication, it was held that on the basis of electricity consumption demand is not sustainable to allege that good .....

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ge of finished goods which were removed clandestinely and various penalties on the appellants have been confirmed. Aggrieved from the said order, appellant is before us. 3. The Revenue is in appeals aggrieved by dropping of the demand of ₹ 2,13,09,972/-, which was worked out on the basis of standard adopted by the Revenue of standard consumption of electricity per M.T of manufacture based on report of Prof.N. K. Batra of IIT, Kanpur. Further, it is submitted by the Revenue that the adjudic .....

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manufacture of same quantity of MS Ingots, which were later removed clandestinely. Further, on stock verification, the shortage of 96.935 MT of MS Ingots was found and the same was accepted by the Respondent Company and the authorized signatory and they also deposited the duty calculated on the same amounting to ₹ 3,35,523/-. Thus, findings of the Revenue are supported with corroborating evidences and as such the demand of ₹ 2.13 Crores is sustainable. The ld.A.R. for the Revenue als .....

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T 307 (Tri.-Mum.) 4. Learned Counsel for the assessee company and the Directors, submits that in this case the main case made against the appellant is that they have clandestinely manufactured excess quantity of MS ingots by utilizing the electricity and goods have been removed clandestinely. The said charge against the appellant has been dropped by the adjudicating authority holding that the quantum of electricity consumption on the basis of report of Shri N.K. Batra, Professor of IIT, Kanpur, .....

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roposed in the Show Cause Notice on account of katcha chits, found during the course of investigation for purchase of scrap. He further submits that there is no admission on behalf of the appellant that shortage of finished goods during the course of investigation has been removed clandestinely, there is only a presumption by the Revenue authorities. Therefore, as appellant is not contesting the demand of duty, penalties are not imposable. He relied on the decision of Hon ble High Court of Allah .....

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er, reported at 2014 (300) ELT 326 wherein, the Hon ble High Court has observed in the show-cause notice that the duty was not demanded on the basis of un-accounted purchase of scraps, demand on that basis could not be confirmed in the Order-in-Original. There must be a demand in the SCN to be confirmed in the adjudication order. In these circumstances, it is prayed that impugned order except confirming demand of duty with regard to shortage of finished goods is required to be set aside. 5. On p .....

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shortage of finished goods found during the course of investigation. 6. For the demand of ₹ 2,13,09,972/- the charge against the appellant has been dropped on the ground that on the basis of report of DR. N.K. Batra, Professor IIT, Kanpur is not acceptable as held by Hon ble Apex Court in the case of R A Casting (supra). Such charge of clandestine manufacture of goods and clandestine removal of the goods has already been held by the ld. Commissioner as not sustainable in the facts of this .....

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tice, therefore, we hold that demand of ₹ 13,70,150/- is not required to be confirmed against the appellant, therefore same is set aside. As demand has been set aside, consequently the demand of interest and imposition of penalty on this count is also set aside. 7. During the course of investigation finished goods were found short and the appellant has paid the duty thereon. Thereafter, conclusion was drawn by the department that as they have paid the duty therefore these goods have been r .....

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